Gobble Gobble! It’s that time again!
Stock Gumshoe is mostly closed down for the holiday week, but we do have to continue our annual tradition of calling out our “Turkey of the Year” … so take a pause from that turkey brining and join us, won’t you?
What is this tradition, you ask?
Every year, as American families gather to give thanks, and perhaps to remind themselves of why they don’t gather more often, we take a moment to point out one of the truly dreadful stock picks that was teased by the newsletter promoters in the past twelve months.
It’s not a particularly scientific process — we usually have a good number of stocks to choose from that are down 70-90% or more from when they were touted, even during good “bull market” years, so we have to pick one from among a bunch of stinkers.
What makes a turkey stand out? Mostly, it’s the mismatch between promise and reality… or, sometimes, the surprise of the collapse. If you’re dealing with a biotech stock about to hit a big FDA decision, you should be going into that knowing that the “thumbs down” could lead to a 90% collapse, that’s why those stocks have the potential to gain 500% when things go the other way… risk and reward are inexorably linked.
So the Turkey of the Year is ideally a stock that performed terribly, defying some wild optimism from the promotion. Sadly, that also doesn’t usually narrow it down to a single winner… so we have to go with the unscientific poll of one: I get to decide. Don’t worry, you’ll have your chance to argue for your own turkey in a moment.
Who, then, are the candidates this time around? Who will win the 11th annual Turkey of the Year?
The bottom of the teaser tracking spreadsheet over the past year has seen its share of the usual suspects (we only consider stock teasers that we’ve written about since the Fall of 2017, and all of the worst performers this year were actually 2018 recommendations) — Chinese frauds, over-promoted microcap tech stocks, biotechs, junior miners and the like… along with whatever fad stocks have emerged over the past year (this year, the hottest fads have been marijuana stocks or “blockchain” stocks). And they’ve come from all kinds of newsletters — the tech hypesters, the value stock dreamers, the fad evangelists, the cheap letters and the expensive “upgrade” ones… everyone lays a big ol’ egg sometimes.
You can review the Stock Gumshoe teaser tracking spreadsheets if you’d like to see how these promoted stocks have typically done over time, but these are the candidates at the bottom of the spreadsheet that jumped out at me — pricing was as of Tuesday:
|Date||Company||Ticker||Newsletter||Editor||Publisher||Buy Price||Current Price||Percent Change||vs. S&P 500|
|3/28/2018||Leading Edge Materials||LEMIF||Junior Mining Monthly||Gerardo Del Real||Angel Publishing / The Outsider Club||$0.60||$0.20||-66.78%||-67.15%|
|3/5/2018||Terra Tech||TRTC||Marijuana Manifesto||Jimmy Mengel||Angel Publishing||$4.05||$1.06||-73.83%||-70.62%|